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with 58 minutes to spare, congress averted the fiscal cliff, but is this just an intermission with the big brawl still to come? it's wednesday, january 2nd, and this is "now." i'm joy reid filling in for alex wagner. joining me today, michael steele. kurt anderson. ron, assistant managing editor of "time" magazine, and mr. sunday morning himself, editor of "the new york times magazine," hugo lindgren.

president obama is back in hawaii today after making permanent the bush tax cuts for 98% of americans. no word if the president will be signing it today with a pen in one hand and muay thai in the other. included in the bill. extension of unemployment benefits for a year and a two-month delay of the automatic spending cuts better known as the sequester. on deficit and debt, the deal is more of a punt, but just averting the cliff has sent the markets soaring with the dow already up over 200 points. while it's no grand bargain, the bill does not tackle spending, by the way, don't miss the significance of this vote. republicans by an overwhelming majority in the senate and minority in the house voted to race taxes for the first time in two decades. just before 11:00 p.m., grover norquist tried to keep his

infamous pledge from going obsolete, tweeting "the bush tax cuts lapsed at midnight last night. every "r" voting for senate bill is cutting taxes and keeping his or her pledge." sorry, grover, the impact of the bill is absolutely a tax hike. supporting it was not unanimous, all but five republicans and three democrats in the senate voted for it, but it was much closer in the house. 151 republicans, more than half of the gop members, voted no, including majority leader eric cantor and republican whip kevin mccarthy. at the end of the day, enough lawmakers across the aisle agreed to the deal, but at a cost of extremely strained relationships. politico reports on an encounter between speaker boehner and harry reid in the white house lobby. go [ bleep ] yourself, boehner sniped, as he pointed his finger at reid, according to multiple

sources present. speaker boehner refused to bring forward a bill funding emergency aid for victims of superstorm sandy. this is how republican peter king responded this morning. >> john boehner has been personally helpful over the years, so it pains me to say this, but the fact is, the dismissive attitude that was shown last night towards new york, new jersey, connecticut, typifies, i believe, a strain in the republican party. we cannot believe that this cruel knife in the back was delivered to our region. >> now, unfortunately, these leaders will still need to work together, and soon. with one deadline down last night, the president has already begun positioning himself for the next fight. >> we'll negotiate over many things. i will not have another debate with this congress over whether or not they should pay the bills that they've already racked up through the laws that they passed. let me repeat. we can't not pay bills that

we've already incurred. >> the debt ceiling is coming, the sequesters are coming. cue the next countdown clock. joining us now from washington, the sage of capitol hill, hardest-working man in news business, nbc's luke russert. the first question i have to ask you, do you sleep, and will you ever get a vacation? >> no and no is the answer right now. >> never. >> i missed it completely. it's funny, my colleagues down on capitol hill, too, missed christmas, missed new year's. new year's eve on capitol hill is quite an experience. nothing like being with oren hatch at the midnight hour. >> getting the fiscal deal, less than an hour to go, but is this just the small battle, and is the real fight willing to come? because republicans are already signaling that they want the debt limit to be when they really stand their ground. >> one of the criticisms people have of pundits and reporters in

d.c. is they are always looking ahead to the next thing and we don't digest what's happening enough in front of us, but in all honesty, joy, the fight that happened over the last few weeks in washington, d.c. over the fiscal cliff really will be child's play compared to what's upcoming in terms of the debt limit. if we had gone off the fiscal cliff, would it have hurt the economy? sure, no question. however, if we go off the debt limit cliff, that will have dire implications for not only our economy, but the world economy, and house republicans are very much aware of this. i spoke to a number of house republicans who are very close to leadership and they kept reiterating they shed too much blood on this tax hike, but they are preparing their powder for this debt limit. the idea president obama is not going to negotiate over it, i think, is going to be very difficult, because house republicans see this as their trump card. they are willing to bring the president, bring the economy as close to the edge, as close to the knees, as they can in exchange for spending cuts.

boehner has this rule he very much believes in. boehner now, especially after this, has to appear strong to his conference. they are going to ask for an exchange for every dollar the debt limit has raised for adjoining spending cut, not to mention, joanne, they know some concessions democrats are willing to make, medicare entry rates, changing social security. they are not going to raise this for the sake of raising it. they are going to want something in return, something big they can show to their members to say we raised the debt limit, but look what we good from president obama, we may want to get 98% of what we want, just like 2011. >> hold on a second, luke, but i want to go to the former chairman of the republican national committee, michael steele on this. a lot of people say this is a complete capitulation and they don't believe republicans can come back and actually exact

spending retribution on the president going forward. do you think the party's going to be able to hold together on that? >> there's some value to the proposition this was a capitulation. if you look at the arguments i and other conservatives made in 2009 and 2010 that we were going to, you know, send a team to washington to fight on some principled ground that talked about how we control spending, how we reduce the size of our nation's debt and obligations, et cetera, et cetera. >> there were no spending cuts in this bill. >> 41 tax increases to $1 in spending cuts, that's a bad deal for a lot of people in the party. i think the argument that luke is making, that republicans are making, you know, falls on some deaf ears right now, because this thing really stings, it stinks, it stings, people are wondering if you couldn't negotiate yourself out of this rabbit hole, what are you going to do about all the other traps

the obama team has set for you down the road, particularly, rhetorically, putting you in a position you're more defensive than offensive. it remains to be seen. there's a having value of the obama folks may be having that muay thai too early, but he's going to have to come back to the table with something. >> the president is saying he will. the president said, no, no, no. we go to the debt limit fight, there's also going to have to be revenue, not just cuts. >> i completely agree with that, but just to focus on just a few years on taxes, at least this would have been considered a dream deal, you know, you've got 98% of the bush tax cuts enshrined now, and it's really a mark of how far to the right the debate has come that we could even say that this is a bad deal. >> right, but you write a lot about sort of the culture in washington. in what dream world do

republicans believe that they can recover sort of in the public mind by now saying, okay, now we want to cut things you like, cut social security, cut medicare? >> let's, if republicans are going to use the debt ceiling vote as a means to get those cuts, first of all, they have to start specifying the big cuts. >> which has been unpopular. >> you say, you say. they haven't done that. second of all, i wonder if the debt ceiling vote, as the true cliff, as the true go nuclear threat, can have -- can be done a second time the way it was the first time. the first time, people, since it had never been threatened before, people, citizens that is, didn't know what it was about. wait, this is -- now they know that it's about paying the bills that we've already racked up. now they know that the mere threat of it went -- drove the global economy crazy in the doubt it raised about american sovereignty. >> the federal government is

going to be in the business of racking up bills it doesn't pay off now, for the foreseeable future. that's going to be news or new development, that's the status quo and is the foreseeable future forever. >> the debt ceiling is not about paying bills already racked up, it's about increasing the limit to spend more, and that is an argument republicans had better be prepared to make to the country why this is bad policy, not good for the fiscal health of the nation. we'll see if they can make that happen. >> 90% of your republican senators voted for this increase. >> including paul ryan. i want to go back to luke real quick. i'm interested in what lesson house republicans took from this fight, because the last time that they tried brinksmanship on the debt limit, they got the sequester, the result of it was this fiscal cliff. it was a selfmade problem. is the lesson house republicans learned they should do it again, as damaging as that is to their reputation and the country? >> i think you have to look at

this, it's not as intellectual in argument to a lot of them as we're making it right now. they honestly believe they were sent to washington, d.c. to cut spending by any means necessary, and i don't think the obama white house realized that in 2001. they certainly realize that now, more than ever, but that's the fortunes up against john boehner, eric cantor, kevin mccarthy. anything they learned is they looked chaotic and weak yesterday when they were going in two ways. basically becoming the laughing stock of the country. a lot of people left confused and even worried because of some weird inner party dynamic they were going to be hit with a m s massive tax increase, but because of what happened this time around, there's going to be a serious move by the gop leadership not to look like they are bending over in any capacity to accommodate the president. they are going to push this to the very end. we'll see what happens. i hope i'm wrong for the sake of the economy and everybody's nerves, but you could play this

tape come march first, i think we're going to be having this same discussion. >> luke, i guess you're not going to have a vacation ever, but if you do get a break, i want you to contemplate a world in which the house majority leader and the whip, the guy responsible for whipping votes, vote against their own leader. what kind of world is that? >> it's quite extraordinary. it's quite extraordinary. occasionally steny hoyer and nancy pelosi broke on a war-funding bill. but for the speaker, one thing we can't miss on that, john boehner doesn't have to vote. he chose to do that, chose to show i'm supporting this, even though we're having this conversation. it's a fascinating dynamic. >> one day we hope you'll get a break, luke russert, thank you very much. after the break, so crisis ave averted, right? most americans won't see their tax rates go up, they will see less in their paychecks. and that's not to mention what this deal will do for the deficit. we'll talk fiscal realities when

ezra klein joins us next on "now." [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. our support teams are nearby, ready to help. it's no wonder so many investors are saying... [ all ] i'm with scottrade.

there's no spending cuts, we're adding $4 billion a day to the debt. >> i thought we were in a deficit crisis. i thought our families were being put at risk by this massive debt. what does this do about that? >> tonight, we will pass 83 provisions that remove federal revenue. totally $3.9 trillion. we are going to look back on this night and regret it. >> a day late and $4 trillion

short. the fiscal cliff debate began 519 days ago when congress gave itself a deadline to address the ballooning debt and deficit. but according to the congressional budget office, the bill cut last night adds nearly $4 trillion to the deficit. the price tag of not letting all the bush tax cuts expire as scheduled. but while this bill does preserve tax cuts for the vast majority of americans, it doesn't mean most people won't see their taxes go up. in 2011, approaching the new year the white house pushed this campaign, #40. that's how much the average american would see pulled from their paycheck if congress didn't renew the payroll tax cut. yesterday, in the dark of night and without a sound, that tax cut expired, enacting a 2% tax hike on all earnings subject to the payroll tax. the non-partisan tax policy center estimates 160 million americans will take this hit, with the average family paying an extra $1,000 a year. so in the lead up to last

night's vote, neither side was pushing #40dollars. so joining us now from washington to make sense of all this is msnbc policy analyst ezra klein of "the washington post." how are you doing, ezra? happy new year. >> good afternoon, thank you for joining me. >> i've been reading my blog, as, of course, everyone should do every day. one of the things that's interesting is everyone is asking is this a good deal, but i think just from reading your blog, it's different for different people. i want you to break it down for me a little bit. let's start with deficits. if you care about deficits, was this a good deal? >> no. this was terrible if you care about the deficit. it was awful. so one thing the budget wonks are happy about is two ways to measure this deal. under one way of measuring it, you'd measure under what the law

said would have if we did nothing. this deal increased deficits over ten years by about $4 trillion. the other way of measuring deficits, which is more common in washington right now, is not measuring against what the law says it's going to happen, but against where we are right now, what would have if policies, tax code, nothing changed. measuring that, this deal cut deficits by $620 billion in ten years, something in that neighborhood. either way, the current policy is closer to the truth, but now we're getting into something where we at least have a common baseline on which to discuss what we're doing from here on out, but this wasn't a big deal. i'm not sure how much deficit we need in the short term, we need more than this. but this was not enough in taxes, there were no spending cuts, and a lot of what we did here wasn't wise just in terms of who's going to get effected and what the tax code is going to look like. >> the other way people judge

this is by their own pocketbook, their own paycheck. by letting the payroll tax cut expire, this was an across-the-board tax increase, not just on the rich. so average taxpayer was this a good deal? >> here's the most amazing fact of the deal, taxes are going to go up more on somebody who makes $50,000 than on somebody who makes $500,000. as you say, the payroll tax cut is expiring. meanwhile, we exempted the families making between $250,000 and $400,000. go up more on somebody making $50,000 than somebody making $400,000 because we exempted families between $250,000 and $400,000 from the top rate increase. it will go up a lot on the very rich, $2 million, $3 million, $5 million a year, you're about to face a very substantial tax hike and it's even bigger when you count the affordable care act, but the expiration of the payroll tax cut is a big

increase on the working class and poor. federal income taxes are the ones a lot of middle income people are safe from. we should say the payroll tax cut has been around for two years now. it was intended to be temporary. it should eventually go away. i don't think it should go away now, because i think the economy is too weak, but it shouldn't be the case when we do a temporary tax cut it become permanent forever and ever because it helps people. that's not a good way to budget either. >> he makes a good point there. it was meant to be temporary, and the reason for it was a stimulus for the economy. they are now taking that off the table. people who are losing that $40 every paycheck, that's money that probably went right into groceries, right into fuel bills. it went right into the economy, and now that's being drawn back into the government. >> payroll tax is one of the most effective stimulus to the

economy, and i really wish -- nobody was willing to fight for the payroll tax to be extended and i agree with ezra the economy is too weak right now, we should be looking at 3% growth before we cut that off, but i wish we would have seen higher capital gains. it's not nearly as high as earned income. that means people who make money from money sitting there are still taxed at much, much lower rates than people who get up and go to work every day. >> i see out of my peripheral vision the chairman is smiling. >> i'm just annoyed. annoyed the disingenuous b.s. that rolls out of washington on something like this payroll tax cut, where just six, seven months ago this administration was lamenting when republicans talked about the payroll tax cut as something to put on the table. oh, no, we can't do that. it would be a tax increase on the american people and middle class, yet you have the numb nuts out here the last 24 hours

saying, oh, the middle class is going to get a good deal here. well, tell that to the person who just ten days gets a paycheck and see $167 less in that paycheck. let me finish my point, then i'll let you have your floor. the administration is not being honest here. you cannot tell the american people this is a good deal for them, when the point you just made, the economy is still weak, this money is real money to the bottom line of everyday middle class americans. don't tell them we're not raising your rates. >> this is not the white house's plan. this is what just passed. >> republicans voted for it, by the way. republicans own it. by the way, also, your -- hold on a second, chairman. they voted for it, as well. it was a bipartisan bill. >> the white house wanted this to -- >> we're going to let ezra back in. go ahead, ezra. >> of all the people in this debate, i agree, we should have

a lot more stimulus, michael, i'm glad to see you on board here, but the white house, of the republicans and of many congressional democrats, though not all, the only people in the entire negotiations trying to extend the payroll tax cut was the white house, and when that proved impossible, they tried to replace it with another kind of tax cut that wouldn't be out of payrolls but would do roughly the same thing. republicans killed that idea, and by the way, we should say harry reid, house minority leader nancy pelosi, they were not very friendly to the payroll tax cut either. but i do think it's a little bit odd to blame the white house when they were the only people fighting for it and congress was in a big way united in not getting it done. we have the system where congress makes the laws here. >> ezra, also point out republicans spent the better part of the last four years fighting against the refundables, things that make lower income people get a tax refund. those are enshrined into law for five years. those were sort of important things that went in for the working class and the

republicans didn't like that either. >> that was a huge deal in this deal. these tax cuts, the earned income, it's an expanded earned income tax credit, expansion of the child tax credit, and expansion of a college tax credit. these single most progressive elements of the current tax code, they help the poor hugely. these are big increases in incomes for the actual working poor. obviously, the best argument you can make out of it is it is very large based, largely progressive. you don't pay payroll taxes over $110,000, but tax cuts for $80,000, $90,000. >> thank you very much, ezra klein. we really appreciate it. we will come back, and when we do, more about the blood clot that's causing secretary of state hillary clinton's hospitalization, also a live update on concerns and her condition next.

secretary of state hillary clinton remains in the hospital as doctors continue to treat a blood clot stemming from a concussion she suffered last month. joining us now with more is nbc's chief science and health correspondent, bob bozel. bob, thank you very much for being here. >> my pleasure, joy. >> can you give us an update on secretary clinton's condition? >> doing very well, responding perfectly to treatment, nbc's cameras captured a picture of bill clinton's car leaving the hospital. didn't see bill clinton in it, but it seems to indicate the family is continuing to visit regularly, which we've known all along. all the neurologists i've spoken to says the treatments for this very rare concussion, here we see what it is, it's a blockage in a vein that drains blood from the brain and takes it to the rest of the body. if that blockage isn't cleared away, it can back up and put

liquid into the skull, which could cause a stroke. that's the reason it has to be dissolved. it's dissolved with blood thinners, first as an i.v. drip, then on to pills. it's not a typical course, many doctors tell me, so no indication to doubt the reports she's doing just fine. >> this was not a stroke, that's important to emphasize, but the treatment is to prevent that from happening. >> absolutely. her neurological symptoms are normal. she has no problems in speech or movement that would indicate she had a stroke. >> thank you very much. we really appreciate it. coming up, undermining their own leadership, throwing f-bombs and taking the american economy into the brink. ladies and gentlemen, your outgoing 112th congress. but if you think that's bad, just wait. why it's even worse than it

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legislation that passed the senate last night 89-8. that is absolutely historic. it was a remarkable accomplishment, because as we all know, while we share the same goals, we sometimes have different paths to achieving them. >> you don't say. probably the biggest understatement of the two-day-old year, but nancy pelosi was right. the final act in the fiscal cliff drama was conspicuous for its rare bipartisan nature. of course, don't expect it to last. that was evident when the ranking member overseeing last night's house debate began squabbling about the upcoming budget battles before even voting to settle this one. >> this is the first step, and now that we have permanently

settled how much revenue the government is going to take out of the economy, we can move on to next steps. >> i just don't want the chairman's statement that this settles permanently how much revenue will be made available. the president has made clear there has to be a balanced approach, and no one should be misled into thinking otherwise. >> the 113th congress will also see the departure of many of the dwindling number of centrists, one of them, california congressman david dreier summed up his thoughts in his farewell speech last night. >> congress is a reflection of the people, and it means that when america is divided, congress is divided. >> well, they certainly are when it comes to how optimistic americans are about the country's future. according to the latest usa today gallup survey, only 24% of

republicans believe our best days are ahead of us, compared to 69% of democrats, who see sunnier skies ahead. but when it comes to the current deep divide in congress, norm ornstein said the blame should be proportioned equally. america's political dysfunction is driven by a republican party that has become an insurgent outlier. in other words, don't expect to see this rare outburst of compromise on the capitol become a thing. joining us, norm ornstein. norm, thank you for being here. >> oh, it's my pleasure, joy. >> happy new year. you write, essentially, the republican party is almost an american insurgency, explain what you mean by that. >> i think we saw a lot of that over the course of the last week or ten days. my friend david dreier says that america and congress are reflections of one another. i think that's not entirely

true. the republican party and the house has now been driven to a considerable degree by a group of radicals, not even conservatives anymore, who are the tail wagging the entire elephant. we saw with the rejection of speaker boehner's plan b, that was pretty much an enormous embarrassment. we see it again now with the rejection of aid for victims of sandy and in a whole host of ways, you've got a group of people who are insulated from the larger public discourse because their districts are homogeneous ecochambers driven by the primaries and money coming in that will threaten them in primaries. >> to your point, if you look at the republicans who actually voted for this in the house, they come from districts who are swing districts, states like pennsylvania, but if you look in the deep south where there's no way they can lose, they were able to stand against this bill. but tell me, norm, what you think it means for the

republican party that boehner couldn't even hold his fellow members of leadership together, couldn't get eric cantor to vote for the bill. he couldn't get the majority whip to vote for the bill. >> yeah. this is not a harbinger of good things to come. we know now that we've got what chuck todd called march madness, this period that will come up right at the 1st of march with the debt limit, the sequester coming up again, and you have a divided leadership team. boehner, who had the guts to go on the floor and vote for this package last night, now is going to have to probably bring up another compromise if he can work one out with the president, that once again might get twice as many democrats as republicans and only a third of his republicans. if you've got a leadership team that's set out markers against you already, that puts him in an extraordinarily difficult and weak position. it's one reason why we're going to be looking at this vote on the speakership tomorrow very

carefully to see how many republicans boehner loses, and he may lose a few more after the sandy debacle. >> i want to go to you, chairman steele, on this question, because the republican party does seem to be disarray, clearly, at its highest level. >> seems to be? >> right. you have a "the wall street journal" editorial in which the advice to the republican party was as follows. house republicans should pursue their own agenda and let mr. obama and senate democrats pursue theirs. mr. obama has his tax triumph, let it be his last. if the "the wall street journal" editorial board is telling republicans hunker down even more, does this bode well for your party? >> no. no, it would kind of bifurcate all over the place. norm is right, we saw that played out on the floor, the split in leadership on the vote, you have members who are frustrated by being led down one rabbit hole, only to wind up in another. i think what "the wall street

journal" is saying, though, and there is some truth to this, you have to identify a strategy and plan and stick to it, and you have to be able to marshal the forces, both inside the caucus and around the country, that is going to be able to explain that to the american people. and no matter whether it's good, bad, or indifferent, at least be consistent in an idea, theme, philosophy, that people can latch on to. may disagree or agree with, but at least there's a discussion point. that has been so much lost over the last year. >> one of the things i'm really interested in and would like to get michael's opinion and norm's as well, what the debate is on policies for economic growth within the republican party, because that seems to be a really crucial thing going forward. >> no taxes. >> the thing is, if you look at the stats, lowering taxes hasn't actually produced any kind of real growth since the 1980s. it didn't do it during the bush cuts -- what is the answer there? >> this is the part that's always missing. everyone says lowering taxes

didn't produce growth. it did. it was offset by continued and increased spending. look at the spending in the bush era. look at the bush in the reagan era. look at the spending. that was the nub, if you will, for a lot of fiscal conservatives, we'd make these grand bargains, these deals. we're going to raise taxes and we're going to cut spending. we always got the tax increases, we never got the reduction of spending. when you look at a level where you have revenue coming here and you continue to spend, that gap -- >> hold on one second. i want to get kurt in here. this is also a culture issue. somehow if they lower taxes, things will be better, but now they have given that argument up, at least for now. culturally, in this capital, can there be any kind of grand bargain? republicans have ceded the tax argument. >> i cede to norm and his

pessimism, but i wonder when you have a third of this far right republican caucus in the house voting on this compromised administration-approved bill, 90% of the republican senators voting for such a thing. after four years, indeed 20 years, of no, we will not vote to raise taxes, that seems to me at least offers the possibility of some -- some -- that the fever has broken. as the president was saying, unbelievably and incredibly. >> the best the president could do was a tax increase above $400,000 a year, i don't know that it's been rolled back that far. i think it's interesting that the republicans were able to hold the line from $250,000 to $400,000. that was something you wouldn't bet on necessarily, but they did. >> the republicans, and to michael's point, the republicans have to start saying, okay, yes, the debt is a terrible problem long term, and indeed it is, and

everybody can agree on that, but you have to start putting some specifics on the table. >> something besides just more tax cuts. >> thank you very much. we're going to have to make that the last point and thank norm ornstein for being with us and wish you a happy new year. >> thank you, same to you, joy. now for a bit of good news. while this congress was one of the most partisan and least productive in history, there are signs of progress on the way. we'll explain why there's hope for the 113th after the break.

so we're 40 minutes into the show and so far we've been pretty down on the 112th congress, but there is some hope on the horizon. tomorrow, the 113th congress is sworn in, and they already have something that's set them apart from the outgoing class, diversity. the new congress is set to be the most diverse in our country's history. as you can see from this

graphic, the new congress will include ten new latinos, 24 new woman, four new african-americans, five new asian-americans and four new lgbt congressmen. will an increase in diversity mean more compromise? one can only hope. coming up, in every contest, there must be a winner and loser, but the winners in the fiscal cliff debate are less clear. who should respike the football and who should regroup next. personalized information and rewards for addressing my health risks. but she's still going to give me a heart attack. that's health in numbers. unitedhealthcare.

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so with the fiscal cliff battle at an end, or at least for a moment, kind of, who emerged from the saga triumphant and whose reputation was left shattered? everyone seems to agree vice president joe biden and mitch mcconnell get high marks for being the calvary who came to the rescue, for others, the result was more mixed. the final result a victory for the american people. a win, really? do you feel like a winner? can we all agree that one

definite loser was congress? for the definitive take, let's turn to our panel. once again, all the way to my right, chairman steele. your picks for the winners, joe biden, an obvious choice, president obama, got a bargain, and the debt ceiling. your losers, gop leadership, but then you repeat president obama and the debt ceiling. >> i think obama basically won by luring the gop down the rabbit hole and biden won because he told mitch mcconnell, i hope you get out of the rabbit hole and close up the hole. i think the debt ceiling discussion is going to be about spending, as it should be, and the problem is that becomes a real mess. so that makes us a loser, and i think obama loses because i think he missed, again, an opportunity to put a real framework on the table in this whole debate. >> all right. let's go to kurt. kurt, you picked tax sanity, president obama, middle class. and anti-tax absolutionism,

grover norquist, sensible, no-drama bipartisanship, and long-term honesty. >> congress is losers, whether they were two weeks ago, they are losers today. i do think -- it's interesting, it's as if the special upper middle class lobbyists carved out win-win for them, because, of course, the payroll tax increase stops at $115,000 or $120,000, and people, you know, up to $400,000, $450,000 for a family, $1,000 don't face income tax increases. so those well to do but not technically rich people really made out. i think there's no question, we'll see down the line over the next horrible months and years to come of this administration how president obama has faired, but i think he's set himself up for this ongoing craziness, as

well as he could imagine. >> for you, president obama, joe biden, and the economy are winners. hard-lined house republicans, rich people, the deficit are the losers. >> i'll start with the economy. i think really that's the most important winner here. we definitely would have gone into recession if we hadn't had some kind of a deal. i think that the rich, clearly, have been hit with a higher top tax rate, but as i said earlier, i would still like to see investment income tax much higher than it is. i think it's really unfair, particularly with the structural shifts in our economy that you can make so much money by having money in the bank while people who get up and go to work every day pay the highest tax rates. >> now to mr. sunday morning, i'm going to rename mr. metta. pok poker theorists and enthusiasts, americans hit by payroll tax, true believers in both parties and poor, old john boehner. >> a lot of gamesmanship in washington and that's attracting

a lot of attention, but i think the outcomes are people are not as well understood in that. that's sort of the poker part of it. i think what we have here is just the first part of the story. they've answered one cliff hanger with another cliff hanger, which is the single most annoying thing that's ever happened, and that's what's happened in washington. a series of new cliff hangers coming up. >> absolutely. really quickly, my winners, definitely joe biden, somebody nobody picked, marco rubio, who set himself up with the tea party in case he wants to flout jeb bush and run in 2016. i think the losers definitely the tea party, who set up this fight in 2013 over taxes and spending and all they got were tax increases in this deal. john boehner is the biggest loser, i think, in all of this. his leadership has been flouted. his own deputies voted against him, and then he told somebody to go and do something horrible. >> that fight begins in two months. >> i don't believe it.

>> politics is the art of turning defeat into victory. >> i want to thank chairman steele, kurt, as well as hugo. that is all for "now." i will see you back here tomorrow at noon eastern, 9:00 a.m. pacific when i'm joined by jonathan capehart, karen finney, nick confisori and lee gallagher. until then, facebook.com/nowwithalex. "andrea mitchell reports" is next. instead i got heartburn. [ horse neighs ] hold up partner. prilosec isn't for fast relief. try alka-seltzer. kills heartburn fast. yeehaw!

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